Northeast Florida commercial real estate: Industrial still setting records as a logistics center

Here is what Avison Young, CBRE, Colliers International, Cushman & Wakefield, Foundry Commercial and JLL are saying about the market at the close of 2023 and the start of 2024.

The Primark Distribution Center at 1511 Zoo Parkway, Building C, in Imeson Park South.
The Primark Distribution Center at 1511 Zoo Parkway, Building C, in Imeson Park South.
Photo by Monty Zickuhr
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Metro Jacksonville’s industrial real estate market produced records in 2023.

In addition to speculative 1 million-square-foot buildings attracting tenants quickly, smaller warehouses designed for tenants from 5,000 to 500,000 square feet were leased.

Companies continued to seek space in Jacksonville to store and distribute goods ranging from food to clothes to construction materials to consumer merchandise, and everything in between, to local, regional, national and international markets.

A historic 7.4 million square feet of space was completed during the year, almost 44% higher than the 2021 and 2022 totals combined, reported Cushman & Wakefield in its Jacksonville Marketbeat for the fourth quarter of 2023.

The year-to-date leasing total reached a record 8.3 million square feet, Cushman & Wakefield said.

That means tenants absorbed existing space as well.

CBRE’s measurement found that a record 11.3 million square feet of space was leased over the year, up 18.4% from 2022.

The West and North Jacksonville markets, the area’s dominant industrial and warehousing areas, commanded most of the action, as in 89% of the new deals.

Vacancy rates ranged from 3.1% to 4.6% in the market, depending on how area commercial real estate companies measured it. 

While vacancy rates are low, they range higher now as more space enters the market.

Asking rental rates rose, as well.

“The industrial market in Jacksonville has started to show signs that it has peaked,” reported Colliers in its fourth-quarter market report.

“Leasing activity and interest have slowed in the last several months and rent growth, while still positive, has stalled.”

Colliers said that Jacksonville “didn’t fall victim” to the overdevelopment seen in other markets, so vacancy remains low at about 3%.

“We expect this number to stabilize closer to 4 or 5% once the remainder of the in-process development pipeline delivers.”

Colliers considers the remaining development to be manageable, “which means that risk of an overshoot is limited.”

CBRE said in its fourth-quarter report that about 4.7 million square feet in speculative projects are under construction “as developers have been aggressive in attempting to keep pace with tenant demand.”

It reported that tenant demand is expected to remain strong in 2024.

CBRE said that only 20 existing buildings and 14 in development can accommodate a tenant of more than 100,000 square feet.

Only three can handle a 300,000-square-foot user.

Cushman & Wakefield reports that 3.75 million square feet of space among 23 buildings is under construction at an average size of 162,878.

It found that the average size of 57 tenants in the fourth quarter was 185,753 square feet.

Also, there are buildings proposed – but not started.

Cushman & Wakefield said about 7 million square feet of space among 22 buildings is planned.

“Locally, the Jacksonville market is bolstered by a healthy employment environment and a growing population base,” reported Foundry Commercial in its Industrial Market Focus.

“Jacksonville’s 3% employment rate (as of November 2023) underscores the City’s attractiveness to talent in construction, health care, logistics and leisure & hospitality.”



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